Toronto Condo Prices Surge To An All-Time High

The benchmark price, a.k.a. the price of a typical condo, reached an all-time high. The benchmark is now $495,600 across TREB, a 10.17% increase compared to last year. In the City of Toronto it rose to $523,000, a 12.35% increase compared to last year. This is the 7th monthly increase for prices, and the 5th consecutive all-time high.

Toronto Benchmark Condo Price

The price of a “typical” condo apartment in Toronto.

Source: CREA, Better Dwelling.

The monster sized growth rate of 10.17% is huge, but is rapidly decelerating. Peak growth was hit in June 2017 at 30.6%, and the only thing faster than the acceleration is the deceleration. Hopefully if you’re flipper, you are familiar with the concept of mean reversion. F**k, if you’re a seller you’re going to want to get familiar with that concept as well.

Toronto Benchmark Condo Price Change

The annual percent change of price, for a “typical” condo apartment in Toronto.

Source: CREA, Better Dwelling.

The median sale price is showing much more conservative gains. TREB reported the median condo sale price reached $490,000 across all regions, a 3.15% gain from last year. The City of Toronto saw a median price of $530,000, a 4.74% increase from last year. Median prices aren’t often used in Canada, but are popular with non-resident buyers.

Toronto Median Condo Sale Price

The median sale price of a condo apartment in Toronto.

Source: CREA, Better Dwelling.

The Average Sale Price of A Condo Is Up Over 3%

The average sale price is also showing much more tame price movements. The average sale price of a condo across TREB reached $559,343, a 3.2% increase from last year. Breaking that down, the suburbs had an average sale price of $457,014, a 1.6% increase. The City of Toronto had an average of $601,211, a 3.8% increase compared to last year. Averages aren’t great for telling what you’ll pay, but are important for understanding dollar volume growth.

Toronto Average Condo Sale Price

The average sale price of condo apartments in Toronto, and the suburbs.

Source: CREA, Better Dwelling.

Greater Toronto Condo Sales Dropped 26%

Toronto condo sales are falling with the climbing prices. TREB reported 2,218 condo sales in April, a 26% decline compared to last year. The 905 represented 644 of those sales, 24.9% less than last year. The City of Toronto represented 1,574 of those sales, a 26.4% decline from the year before. Declining sales happen for a lot of reasons, the most obvious being a lack of inventory to sell. However, it can also be due to a lack of buyers absorbing the price increase.

Toronto Condo Sales Vs. New Listings

The number of condo sales, vs newly listed condos per month in Toronto.

Source: TREB, Better Dwelling.

Greater Toronto Condo Inventory Rises Over 29%

The number of newly listed condos in Toronto is on the decline. TREB reported 3,652 new condo listings, a decline of 16.54% from last year. The City of Toronto saw 2,535 of those listings, a 20.23% decline from last year. The sales to new listings ratio is within one point of falling into “balanced” territory. Despite the drop in new listings, the decline in sales and building inventory still pushed inventory higher.

The total number of active listings, a.k.a. condos for sale at month end, are climbing fast. TREB reported 3,394 active condo listings, a 29.04% increase from last year. The City of Toronto represented 2,130 of those active listings, 10.93% higher than last year. Inventory levels are climbing closer to what we’re used to, but prices and sales aren’t.

Toronto Active Condo Listings

The number of condo listings available for sale in Toronto.

Source: TREB, Better Dwelling.

The condo market hit an all-time high, but the deceleration is the biggest takeaway. The rapid deceleration likely means we’ll see much cooler (or negative) growth. Inventory is climbing closer to levels observed before the massive run. Unfortunately, sales are also falling below these levels.

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56 Comments

Sold last year, couldn’t be happier. Missed out on a few bucks (literally similar units in my building are selling for only $10k more). The satisfaction of knowing I’ll be able to sell quickly greatly beats the few extra dollars of risk I would be taking having held on to it up to now. When someone offers you 30% more than you paid a year ago, you take it. There is ZERO chance fundamentals of a city changed by that much.

I look forward to buying back into the same building about 30% less in a couple of years.

Mo, I agree with you 100%. I did the same thing last year, missed out on 10 thousand but sold in two weeks for $120, 000 more than I paid for it 2 years prior! Couldn’t believe someone would pay that much more for a condo. Looking forward to jumping in with more money at a lower price.

If people listened to bears last year, they would have LOST money, and missed out the new highs. Bears may be very smart, and the market may not make sense, but that doesn’t mean they’ll always be right.

I think it will be slow at first. There will be some denial and there could be a further spike in rental demand as more people sell and hold off buying a new property. This might give a few investors a sense of calm (getting closer to cash flow positive).

Once a few pre cons fail to sell out and have to start discounting and some of that record supply starts to hit the market next year I think it will turn into a full blown panic. and prices will fall off a cliff.

I see 1 bdr condos as the floor for the market as a whole. They are still doing well. But we are starting to see a slowdown in larger unit sales. Once the 1 bdr condos go i expect to see a lot more panic in the sfh market as well.

Buy in markets with better yield, like Brantford. No smart investor would buy a negative yield home at this point, and they’ll dump their tenanted units as soon as prices start to get close to their purchase price.

Ok. Here we go again. All the bears came out again! You guys say same shit for years now! If I would listen to you guys I wouldn’t buy my 2 condos in Downtown Toronto in 2015 and I would miss appreciation of $250000 on each. Here is what I think will happen, at least in Downtown Toronto condo market : yes the appreciation probably will be slower, may be 5-8% per year but prices will still go up in good area like Downtown Toronto. Also the rents will go up so for some it will improve cash flow. Even if cash flow a little negative that’s not a big thing – the price appreciation will do only good for a long time. You guys don’t understand how much money in Toronto, either it old money, young money, smart money or money from rich immigrants who can easily sell their flats in London, Paris, Moscow, Tel Aviv, Hong Kong etc… and buy condo in Toronto mortgage free, specially when Canadian dollar is so cheap compared to US dollar. So good luck betting against Downtown Toronto condos.

AM is a renter from Ottawa with bad credit and no dental plan. this is exactly the person we should listen to! total troll loser with no money, no portfolio, no analysis. gear74 congrats on your solid investment. you took the risk and it worked out. These commenters take no risk except for hurting a finger nail while typing bullshit comments. this is not a site for investors – it is for bears trying to justify their crappy, inexperienced points of views to make themselves feel better that they lost out on one of the greatest real estate growths. Does Gretzky take advice from the pee wee coach? does a landlord take advice from a renter in real estate investment? Does Elon take advice from shareholders that own 5 shares? what a joke! These punks think investors are losing money in real estate! investors laughing all the way to the bank baby. my team looks at rental applications all day for our multiple properties and laugh our asses off at all these millenial fool applicants.

Al i heard was ‘blah blah blah I’m a huge piece of shit blah blah blah’. And the obvious overarching sense of how stupid you are if you don’t see what’s been brewing for a decade now and will have to play out at some point.

So now you’re posting with two different screen names in the same thread, pretending to have a conversation? That’s a new low, even for you. Either that or two wealthy successful GTA landlords just happened to show up within minutes of each other to discuss their success on the same bearish forum. Yah, that happens every day.

I’m glad the escort agency you work for screens your clients so carefully. In your line of work, one bad trick can cost you your life.

AM I don’t know who you are talking about. I guess there is another bull guy here. I can assure you I am using only one nickname. Anyway just said my honest opinion. If you don’t want to believe it’s your problems. I guess we just need to wait for more time to see who is right and who is wrong.

If you aren’t really Chester (i.e. Landlord from the GTA), then please accept my deepest apologies. I can’t think of anything more insulting than being compared to the likes of him, and I am truly sorry.

Those that don’t invest in GTA real estate take a risk every day. A risk that your simplistic childlike arguments actually turn out to be right. (Look how much it’s gone up! You guys have been saying a crash is coming, and look how much it’s gone up! I bought for X, and sold for Y! Look how much it’s gone up! Still cheap compared to Hong Kong! Immigration! Look how much it’s gone up! Did I mention I bought for X and sold for Y?)

Yup, 30% annual increases when the market’s hot, 5-8% when it’s not. That’s how all this works. We’re all a bunch of chumps for not grabbing that 1/2 mill that you so easily picked up. I mean, look at what’s happened in the recent past! Bears are so stupid.

I think you’re right about downtown Toronto. Jobs are concentrated in downtown and as more people choose to give up big homes in the burbs for shorter commute times I can’t see demand slowing down for condos. However, there is a limit to this. If we keep building like mad men, there will be a time when we build more than demand.

That being said, if you can stomach a short term drop, things will be fine in 20 years. This is why I struggle to get into the game now (missed out on the past 5 years…sadly), because I dn’t want a negative cash flow asset that has big price correction/stagnation risk. Even if condos continue to grow 2-5% that isn’t enough to offset inflation and increased maintenance fees. Rent controls have really limited cap rates and the government is only going to get more stringent in the future.

At this point in time, it seems to me that selling your amazing condo investments and re-allocating to other jurisdictions or SFHs would be more beneficial from a short term perspective as well as a long term perspective.

But hey, WTF do I know. I sat on the sidelines for the past 5ish years thinking rates couldn’t stay this low forever.

Grizz, I prefer not to discount any facts I see, and I also agree with everyone who is saying that Jan-May prices growth is more than we anticipated for a Bear market. From Jan 1 till May 10 median price for all Toronto properties grew 24.8% (as per zolo). Median price… for all properties combined, not just condos. This is a very strong market force. Condo prices are posting new records as we speak.

If I can find Toronto credit growth for the same period I can easily tell you if it’s a reckless borrowing is behind that price growth, but I don’t have this data that’s why I don’t discount any forces. If credit stayed relatively flat the same then it’s not local borrowers pushing prices up but either foreign capital or capital from other parts of Canada.

I’m telling you that only because you looks like a kind of guy to me who tries to stick to the facts, not just ideas or beliefs.

My position is that the main forces that led me to being bearish in the first place; Bad debt and FOMO investors tied to extremely high house prices, has not at all been resolved. Those factors are what can bring down our economy, and only get exposed when the credit cycle turns. The credit cycle has started to turn.

With the stress test now in place, if sales pick up and hold up month over month for the next year or so, then maybe a lot of the debt whores and speculators can unload their properties to those that can afford it. When I see evidence of that I will change my position. I discount anything I see coming from RE mouthpieces like buzzbuzz or mortgagebrokers because they have an incentive to try and pump the fomo back into overdrive.

I find it hard to believe that any rich foreign investor would want to buy something that is not only falling in price, but must be first converted into a currency that is losing value.

I hear you but in no way I challenged bearish fundamentals in my post and I’m sad you read it this way.

You know I’m betting USD/CAD, I also have my short positions prepared, there is no doubt Canadian RE is completely ill and I’m ready to bet my money that it will crash within the next 3 years. We don’t even need to challenge and discuss it’s here it’s clear as day.

You can’t reduce debt without crashing RE and at the same time RE prices can’t grow above 3% without debt levels increase. Even that single fact is enough to understand that there is no way out of household debt other than RE crash. Bulls want RE prices to grow? Sure, but debt levels will grow too which are already highest in the world.

Huge GTA market prices swing +30% in Q1 2017, then crash -20% then recover +20% – it is a clear sign that there is extreme levels of speculation in the market and Urbanation’s report with 48% number revealed that to everybody. This single report is also more than enough to prove that things are out of hands in the market and completely unsustainable.

I can name many other reasons here why long term bearish position is extremely strong. Like yourself, I also sold my house in 2017 after doing extensive research of Toronto RE market. So I’m not just “talking” here, I put my money where mouth is already.

You mentioned that credit cycle started to turn and you are spot on here. We have 1000 GTA buyers who refused to close their deals last year and now may face lawsuits or bankruptcies. There is a guy on Twitter who is posting almost daily properties which were sold at a loss around GTA so some people are losing money. Ave. price is -11% nationally and overall credit is shrinking. We are in correction mode now.

For me it’s not a question “if” market will crash but “when” and “by how much”. All my current research is aimed to answer those question.

Personally, foreign investment changes sounds like an interesting topic we can discuss and try to find answers together, but if you guys are not interested – no problem at all. I only bring it up because I don’t have those answers myself.

All good Xelan, just didn’t like the comment about sticking to the facts. When I decided it was time to sell, I had to dig deep and ignor the bulk of sources that said real estate would only go up. Especially sources like buzzbuzz and mortgage brokers, couldn’t trust them then, don’t see any reason why I should pay attention to them today.

If the point is that the psychological effects of the foreign buyers tax on locals killed the buzz here, then sure maybe if locals think foreigners are all coming back it would have the psychological effect of making them want to jump back into the party. I think that’s 100% the reason buzzbuzz et al is reporting on that.

Unfortunately for the party animals. It’s already last call and the taps are about to go dry.

The only thing that drives the Vancouver market is offshore demand at the high end – the local economy has been completely disconnected from local housing costs for many years now. That demand appears to be weaker right now than it has been for the past 16 years. But, I have been unable to find a satisfactory predictor of offshore demand, so it would be foolish of me to make any sort of prediction on the future of the market here. Does anyone on BD feel they have an accurate indicator for future offshore demand?

Buzzbuzz homes would tell us Martians and Saturnians were buying if they thought we’d believe it. Also, the headline says they “may” be returning. Hardly confident wording coming from an industry propaganda rag. I hypothesise that they may not be returning. Aren’t I clever?

Step one: Post the required narrative somewhere mitigating it with maybes and couldbes.

Step two: Start “thoughtfully” referencing it while doing a simple sleight of hand trick concluding reposts with something like “prices dip in detached segment and crappy loonie are doing their job… unfortunately” as if the required narrative is a verified fact.

I’m for truth. Buzzbuzz is for buzz. Saying Chinese buyers may be coming back is as useful as saying that Toronto sellers aren’t panicking. Both headlines are flimsy attempts to manipulate market psychology by presenting non-information as information, and framing it in such a way that it supports bullish sentiments.

Thanks for the honest answer, Ali. Just for the fun of it lets quickly summarize major developments within the last year and try to explain those (find the truth). Market grew irrationally with extreme greed in Q1 2017 and then foreign buyer tax was introduced which scared the hell out of everyone and prices slid by about 20% between April 2017 and Jan 2018. Greed changed to fear because of the foreign buyer tax. Makes sense so far? I think so. Then in Jan we had another major regulation – B-20, which is extremely bearish by its nature, sometimes even labeled “the most significant regulation”. What impact was expected? Further prices drop or at least growth below Oct-Nov 2017 levels. What happed in reality? Fear switched to Greed immediately in Jan 2018 (which is kind of strange already) and prices started to climb back in all Toronto housing types. We made an assumption – maybe people just thought it’s a last chance to enter the market and used preapprovals to avoid B-20. That was a valid assumption at that time however it’s still a little strange why in December there were afraid to do that but in January they gained confidence (since B-20 was announced long time before Jan 2018). As of today prices are still growing in all sectors so “pre-approvals” theory doesn’t really hold water anymore. There is really no good explanation for me why “15% foreign tax” caused 20% drop in prices but “B-20” didn’t even slow down recovery from December. Based on pure logic I would expect the opposite to happen because we don’t really have much foreign speculators here, but a lot of people will be affected by B-20, correct?

Your ideas?

P.S. those answers are just helping to understand the real reasons behind those market moves but they don’t define fundamentals which are definitely bullish. You can check my response to Grizz above.

Major banks are now trying to increase sales by cutting variable rate mortgages to below market rates, further indenturing an already financially screwed generation, and making a mockery of government changes to mortgage lending regulations aimed at protecting buyers from themselves, and further imperilling the post-correction economy. They can’t be dumb enough not to see how absurd playing interest rate good cop bad cop with the feds is, so it’s down to pure evil.

If I shit in a bowl and my dog eats it who is the dumby? We are doing this to ourselves. Being trapped by FOMO again. This is like the teaser rates in the US but we know they are going up and still eating them up. Nom nom nom.

Lowering variable rates is just baiting the trap. You can imagine when rates start climbing, how eager those with variable rates will be to lock in, except they’ll lock in at higher rates than today’s fixed. Teaser rates in the US served the same purpose. As we saw in the US, the strategy is not without risk, to both the borrowers and the lenders.

Been seeing all the comments. I don’t know how to explain this to some of you, mainly the trolls and/or morons who seem to thing ‘new high’ means ‘lets go get high right now and buy some fucking condos’… The R-squared is negative…sweet lord I don’t understand how yall don’t understand what this means even when there is a god damn chart. Next month will be another ‘high’ but the MoM delta will be lower, the next month will be the same and then ‘shocker’ the prices come down as the pricing flips and we hit neg YoY. This happened in SFH and will continue for the next 6-12 months, maybe 18. It is happening to condos but there is a 4-6 month lag because all the dumb money was in housing. To all the pigs and possums who like to gloat about how much money they made, you’re a paper champion until you liquidate. Which you won’t. Come back in 6-12 months when the ‘half a millie’ you made on your condos has been cut in half. You’re still a ‘genius’ because you got in early but damn it must suck to lose a $250. Slow clap. You are a weiner. BD4L.

What a mess, housing bubble, stock market bubble, record debt levels, personal and government, greedy PS unions, baby boomers…POP, its coming…will be fun to watch from the sidelines…suckers…lollllllllllll